JCR Eurasia Rating, in its periodic review, has affirmed the ratings of ‘Bossa Ticaret ve Sanayi İşletmeleri T.A.Ş.’ as ‘A-(Trk) on the Long Term National Local Scale along with a ‘Stable’ outlook. Long Term International Foreign and Local Currency Scale

JCR Eurasia Rating, in its periodic review, has evaluated ‘Bossa Ticaret ve Sanayi İşletmeleri T.A.Ş.’ in an investment-level category on the national and international scales and affirmed the ratings on the Long Term National Scale as ‘A- (Trk)’ and determined the Short Term National Scale as A-1 (Trk) with ‘Stable’ Outlooks. Additionally, JCR Eurasia Rating has affirmed the Long Term International Foreign and Local Currency Ratings as ‘BBB-’. Other notes and details of the ratings are given in the table below:

Long Term International Foreign Currency

:

BBB-/ (Stable Outlook)

Long Term International Local Currency

:

BBB- / (Stable Outlook)

Long Term National Local Rating

:

A- (Trk) / (Stable Outlook)

Short Term International Foreign Currency

:

A-3 / (Stable Outlook)

Short Term International Local Currency

:

A-3 / (Stable Outlook)

Short Term National Local Rating

:

A-1 (Trk) / (Stable Outlook)

Sponsor Support

:

3

Stand Alone

:

B

Bossa, established by the Sabancı Group in in Adana 1951, operates mainly in the fields of denim, shirting and outwear production via its three main plants. Company business activities are carried out by increasingly more qualified labor in modern and integrated production plants. The Company has been listed on the Borsa Istanbul (BIST) for 20 years and differentiated itself in an intensely competitive sector thanks to a broad product range, customer-oriented service approach, national and international network-supported export identity, public incentives in Production and Development, participation in the Turquality program, efficient price policy, ability to purchase cheap and qualified raw materials from across the globe via a professional purchase and logistic team, ongoing investments in renovation and modernization, a rich Company history, and designer directed fashion design.

While pressure on the Company’s liquidity due to financial requirements of the main shareholder Akkardan Sanayi ve Ticaret A.Ş. negatively affected Bossa’s asset size and equity level, the Company aims for repayment through dividend payments in the following years. In line with this, the Company projects a decrease in interest expenses due to a refinancing of all bank loans in 8 year maturities. The Company has ceased production of unprofitable products to improve profitability despite a reduction in production and revenue, positively affecting the profitability and operating expenses.

Moreover, curbed appetite in the sector due to political uncertainty in Turkey in addition to economic crisis in Europe, high related party transactions and deteriorated profitability ratios due to accelerated financial expenses derived from increased borrowing structure are factors creating pressure on the Company. On the other hand, the low level of impaired receivables supported by risk management implementations, the supported cash level through the sale of idle assets such as clothing factory and chemical tank, the 8 year maturity in borrowings through realized credit refinancing, liquidity advantage of the successful use of capital market instruments via ongoing bond issuances, the high share of export figures in total revenue, the elimination of FX risk despite foreign currency weighted loans due to the realization of national and international sales in foreign currency, the ongoing cooperation with international brands, and the reasonable off balance sheet position thanks to the removal of guarantees to the main shareholder have contributed to the determination of the Company’s outlooks in the short and long term perspective as ‘Stable’ and affirmed the Long Term National Grade as ‘A- (Trk)’ with the opinion that the projects have a high realization capability and the stream of cash flows will be realized in accordance with the principal and interest payments.

Bossa Ticaret ve Sanayi İşletmeleri T.A.Ş. ’s Sponsor Support Grade has been affirmed as (3) within JCR Eurasia Rating’s scale based on their financial capacities of the controlling shareholder Akkardan Sanayi ve Ticaret A.Ş. with a share of 93.75%. 6.25% of shares are publicly listed. On the other hand, taking into account the Company’s ongoing sales volume, internal equity generation capacity, long term borrowing structure converted from short term borrowing thanks to credit refinancing, positive contribution to asset quality from the low level of non-performing loans achieved through effective risk management implementations and the reputation from national and international markets, we, as JCR Eurasia Rating, are of the opinion that the Company has reached the level of adequate experience and facilities to manage the incurred risks on its balance sheet regardless of any assistance from the shareholders, provided that it improves its current customer level, efficiency and existing macroeconomic level in the market. Within this context, the Stand Alone grade of the Company has been affirmed as (B) in the JCR Eurasia Rating notation system.

For more information regarding the rating results you may visit our internet site http://www.jcrer.com.tr or contact our analyst Ms. Merve HAYAT.

JCR EURASIA RATING

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